Rural poverty in Latin America Determinants and exit paths

While rural poverty in Latin America has declined over the last three decades, success has been uneven across countries and rural poverty remains huge. Reduction in the number of rural relative to urban poor has been mainly the outcome of migration, not of successful rural development. We show that rural incomes are explained by the asset position of households and the characteristics of the context where assets are used. Given heterogeneity in asset positions and contexts, many strategies to escape poverty consequently exist. We identify four paths out of poverty: exit, agricultural, pluriactive, and assistance. Successful rural development to promote the agricultural and pluriactive paths requires a wholesale new approach based on regional development, decentralization and participation. Agricultural technology has a role to play in these two strategies. In Latin America, however, the bulk of the benefits from technological change has been captured through indirect effects via the price of food, employment creation and contributions to aggregate growth. (C) 2000 Elsevier Science Ltd. All rights reserved.